Assets that must go through probate are only transferred to an heir under the supervision of the court. By operation of the law, the proceeds from life insurance policies, bank accounts with payable-on-death designations, certain retirement accounts, and certain forms of real estate ownership pass directly to the beneficiaries named in the accounts, which means that probate is not necessary in those instances.
A person can set up a living trust and transfer all of their assets into it, but this does not necessarily guarantee that none of the deceased person’s property would be considered probate assets when the estate is settled.
Living trusts indeed prevent the probate process from being required for the property that is held within them; nevertheless, the decedent may accumulate new assets throughout their lifetime and forget to leave all of those assets to their trust.
The creation of a pour-over will is a popular solution to this problem. This will direct property that is not part of the trust into the trust upon the decedent’s passing; however, these assets are still subject to probate and contribute to the estate subject to probate.
Individual assets consist of any real or personal property titled in the deceased person’s sole name, without any co-owners, payable-on-death provisions, or beneficiary designations. In most cases, they consist of financial assets such as bank accounts, investment accounts, stocks, bonds, automobiles, boats, and airplanes, as well as business interests and real estate. They can also contain personal property, such as artwork, collectibles, and electronics, which may or may not have considerable worth depending on the circumstances.
In addition, if your account beneficiaries pass away before you do, assets that might not have been subject to probate in any other circumstance become subject to probate. This is one of the many reasons why it is essential to regularly keep your estate plan up to date. You can modify your beneficiary designations in the event that someone you had planned to name as a beneficiary passes away before you do. For example, if your spouse passes away first, you may want to amend some assets so that your child is listed as a payable-on-death beneficiary. This will allow your child to avoid going through the probate process regarding those assets.
After your death, the probate process is not necessary for anything that you own jointly with another person. This is a common method of property ownership among married couples; for instance, you and your partner might be listed as owners of the house on the deed. In the event that one of you passes away, the other spouse will still own ownership of the home, and they will not be required to go through the probate process—they’re already owners of the house.
One of the other ways to ensure that a person you want to have an asset or a piece of property does not have to make its way through probate to give that person joint ownership of the asset or property. If you add your child’s name to the deed of your house, for instance, you can ensure that your child will be able to take immediate possession of your house after you pass away. But, on the other hand, this also means that your child will have joint ownership of your house while you are still alive, which could make things more difficult if you ever decide to sell the property or get a mortgage.
If you need to craft an estate plan that makes your loved ones’ lives easier upon your passing, there are several options, including avoiding the probate process altogether. Call us or reach out online to talk to an experienced estate planning attorney who can walk you through the process of preserving your legacy and protecting your assets. We take satisfaction in being able to help with every aspect of estate administration at the Law Offices of Alice A. Salvo. Give us a call today for a free consultation and we will address any of your concerns.